Posts by Rod David
The First Trade & Pre-open Tour Recording… Isolation setup, too.
Proper context can start the day with a solid win and make all the difference.
DAILY SCHEDULE
First, watch the pre-open Tour recording HERE <<==
Then, meet in the chaRTroom here by 9:15 ET for updates and Q&A
Through the prior close…
Monday was book-ended by trade war news. Sunday afternoon headlines triggered a gap down that hovered 2904.00 overnight. Testing and attacking Friday’s 2911.25 fresh high close before and after Monday’s open found plenty of sellers post-open. The morning bias-down signaled and its target was met, as were the afternoon bias parameters when more headlines announced that tariffs would be announced post-close. The optimal 2897.00 pullback limit was probed by 4-5 points, and then recovered 1 minute after the close, too late to be bullish.
Overnight action’s new info…
Another trade war headline onslaught, and another brief effect. The forewarned tariff headlines were greeted at 2893.50, which is Tuesday morning’s bias-down signal. The first reaction collapsed down to 2887.50, which is Tuesday morning’s bias-down target. Another dip extended down to 2883.50, where a rally began, recovering to 2893.50 by midnight. The rally resumed and recovered to greet Europe’s opens in positive territory, absorbing a brief dip before extending higher to touch 2903.00.
If, then… (notes to accompany the Tour recording)
Before yesterday’s close, Monday’s pullback would have ended as a very natural pullback by holding the test of 2897.00‘s “lower prior highs.” After yesterday’s close failed that, reinstating upside momentum could be done by proxy at the following open. But being one timing window later would require opening above the next prior high, which is 2903.00. That’s where the open is currently indicated. More so, another potentially bullish setup has developed after probing under Monday’s low, which is to isolate its probe to the overnight by opening back up within Monday’s range — and not probing back under it intraday. Avoiding either setup to instead open under yesterday’s low could still complete the pullback by holding a test of 2887.00-2888.00. But any deeper of a pullback would be bearish, while fully forming at least one setup without also triggering it would be as bearish as it would have been bullish.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2903.50 would be likely to trigger the 2901.50 bias-up signal at 10:15. Exiting the open under 2897.00 would be unlikely to trigger bias-up.
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2895.50 | 2901.50 |
| …would target | 2901.50 | 2907.50 |
| Bias-down: under | 2887.50 | 2893.50 |
| …would target | 2882.00 | 2888.00 |
| Signal status: BIAS-UP, BIAS-UP TARGET MET | . | |
| NEW: BIAS VIDEOS… INTRO // EXAMPLE | ||
1. At 10:15, trading above the bias-up signal or under the bias-down signal would put into play a test of its bias-up or bias-down target.
2. Not triggering either bias signal at 10:15 would be “no-bias,” and the bias signals should define the bias environment’s range.
— A test of the opposite bias signal would be targeted if one bias signal was tested before triggering no-bias.
3. Touching the bias signal within 3 minutes either way of 10:15 would invoke a grace period through 10:30 to trigger a late signal.
— “Late” signals don’t require testing the opposite bias signal, but it’s still likely.
4. Still testing the bias signal at 10:30 after invoking the grace period would trigger “noN-bias,” with no bias influence.
Market Wrap (recording & summary)
Blame it on the trade war. Friday’s fresh high close at 2911.25, sufficient backing-and-filling behind it, was free to extend higher without delay. 
Buyers had not gained traction Friday afternoon, so immediately resuming the rally Monday required gapping up. Not gapping up would not resume the rally earlier than late-afternoon.
Monday did not gap up. In fairness to Monday morning’s buyers, Sunday night had gapped down, and stayed down testing 2904.00, in reaction to trade war headlines. Bias-up was probably not an option, but the morning’s 2907.00 bias-down triggered anyway when no-bias would have sufficed.
Despite already probing the morning’s 2900.25 bias-down target by 1 point, the afternoon’s 2901.50 bias-down triggered anyway. Its 2896.50 bias-down target was probed by 4 points.
Probing under 2897.00 without closing back above it does threaten to reverse the trend down. Post-close action immediately surged back up through 2897.00. Too little, too late, to establish a position of strength, but it may still help to absorb selling pressure from the post-close trade war headlines we were told are coming. Recovering Monday’s last relative high at 2903.00 at Tuesday’s open would now serve by proxy.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.
Daily Spot…
A daily summary of high-profile members of several complexes… View a more detailed discussion of each chart at the end of today’s Market Wrap.
Eurodollar Dec Contract (EC, ETF: (FXE, UUP))
Monday’s gap up back above Thursday afternoon’s low still produced only an “inside day” compared to Friday’s range. Its upward bias suggests the first range break will trend downward. Closing under 1.1720 would launch a downleg.
Gold Dec Contract (GC, ETF: (GLD))
Monday’s gap up above the 1201.50 sell signal peaked at the 1209.50 buy signal without triggering either.
Silver Dec Contract (SI, ETF: (SLV))
Monday’s choppiness hardly threatened to trigger the 14.33 buy signal, which essentially defaults to being bearish and targeting fresh lows.
30-year Treasury Dec Contract (US, ETF: (TLT))
Gapping down Monday to fresh lows at 141-08 was recovered to fill the gap back up to Friday’s 141-22 close. The 141-08 gap open under all prior lows will want to be retested from above before a durable rally can begin, and meanwhile the decline’s momentum remains intact.
Crude Oil Oct Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Retesting the 69.50 buy signal into and out of Monday’s open still didn’t trigger it. But momentum hasn’t reversed down until closing back under 67.80, so breaking higher by Tuesday morning would still be credible for extending.
Natural Gas Oct Contract (NG, ETF: (UNG, UNL))
Gapping up and firming intraday tested the lowered 2.83 buy signal. Recovering it through the close and then subsequently also recovering 2.87 would signal and confirm a new upleg underway.
Mid-day Update… The pressure stays on.
Another bias-down.
This morning’s 2907.00 bias-down signal triggered, and its 2900.25 bias-down target was probed by 1 point. 
Bouncing into the noon hour attacked 2906.00, but never recovered this morning’s bias-down signal. And now this afternoon’s 2901.50 bias-down signal has triggered.
Already, that has produced a fresh post-1:20 low, which essentially confirms the signal. Fresh lows are attacking its 2896.50 bias-down target to within 6 ticks.
None of which gets the rally any closer to resuming this afternoon, although the pullback still has room to test 2897.00 without even threatening to reverse the trend down. And then that threat could test 2887.00 before actually reversing down. But the rally is likelier to resume — sooner, rather than later — and doesn’t otherwise benefit from further backing-and-filling.